How confident are you in your pricing structure?

How confident are you in your pricing structure?

by | Aug 13, 2019 | Business Success, Finance, Tax and NI

I’m asking this question, purely from the fact that if you’re not fully confident in your pricing structure and what you’re charging, this will come through when you are talking to potential clients.

And this is whether you feel that your prices are too high, or whether you actually feel they’re too low.

Two examples of this.

Example one – no confidence in pricing structure

Just this week. I found a potential business coach for me, booked a call and the conversation was going quite well.  But then it ultimately came down to pricing.

I suspect that she had looked at my website and my online profile and put me in a category of earning six or seven figures, which, quite frankly I don’t.  And so she quoted me $25,000, per month.

Yeah, you read that right, $25,000.

After nearly falling off my chair and reaching for gin and tonic to take a good hard slug I informed her that this was completely and utterly out of my price bracket. She instantly discounted. And so, I thought I’ll see how far I can push her.

Within, literally one minute, two minutes maximum, she had bought that price down to $500 per month.

Now, what did I think? “Wow, this is fantastic. I can now afford her I’m going to sign up with her.”

No!  In fact, the complete opposite.

I instantly thought if she is discounting by $24,500 in less than two minutes, she’s a fraud. She’s making this up. She’s not confident in her pricing. She has no idea what she’s doing. And she’s certainly not someone that I want to work with.

Example 2 – 100% confidence

On the other hand, many moons ago when I was moving from employment to self-employment, I called a business coach who I really wanted to work with. And yet, yet again, she was out of my price range. I asked her what she could do for a lower finger, and she would not budge.

She knew her worth, she completely stuck by her pricing, she said to me, this is what it is. if you want to work with me. That’s what you’ve got to pay. She wasn’t quite that blunt, but that was the message that crystal clearly came across. What did I do? I found the money, and I went with her.

Do you see the difference? If people really believe in you, they will find the money and they will work with you if you’ve got something they really want. But you must believe in yourself. Instantly going into discount mode screams desperation, it screams you don’t believe in yourself; it screams you don’t really know what you’re doing.

Set your prices, believe in them. And as I mentioned, if your pricing is too low it’s going to come across because you’ll falter when talking, you’ll feel a bit icky inside.  You’ll think, bloody hell, I’m going to be doing all this work and I’m not really going to be charging my worth. It’s not a good feeling and it will come across in your voice.

Go sort your pricing structure out. Be 100% confident that you’re earning what you’re worth, but you’re also not pulling the wool over people’s eyes and just simply trying to rip them off.

Any thoughts? Let me know below.

Pricing your product or service

Pricing your product or service

by | Apr 14, 2015 | Business Success, Sales and Marketing

Do you struggle with pricing your product or service?

There is a saying that ‘People look for the cheapest price when there is nothing else on offer’.  And that is why I try to get people to not compete on price when starting up their business.

When I talk to people looking to start up their business, or who are in their first couple years of trading, and I ask them why customers will choose them over the competition, so many tell me because they are the cheapest.

And this is when alarms bells start ringing for me.  If price is the only thing you can compete on, you will find yourself a busy fool with customers that nobody else wants.

Make sure you charge the right price

If people only bought on price why would we have such a range of cars on the roads at vastly differing prices?  A Robin Reliant gets from A to B in exactly the same way as a top of the range BMW.  But the BMW has reputation, trust, additional comfort and reliability that people will pay for.  Why do some people buy a tee shirt for £9.99 in M&S when they could get an almost identical one in Primark for £1.99?  Is it the customer service and better layout of items?

Find something of value to offer in your business and charge the correct rate for your products or services.  If you don’t, the competition can quite easily wipe your business out by simply offering a price match or doing a heavy discount for a period of time that you simply can’t match.

Having something of value to make you stand out doesn’t have to be a material item.  It can be a small, simple step you have in your business that can make a big difference to the customer that makes them remember you.

Uniqueness and value are perceptions so it could be something as simple as a follow-up phone call to ask if the customer is happy with their purchase.  It could be a daily or weekly email (dependent upon what you are selling) as to how their order is progressing.  It could be a tiny thing such as including a small length of ribbon and a gift tag if you know your product is being purchased as a present.

Remember, it is the unexpected things that influence us and that we remember.  These things will have far more impact on our future buying decisions than having the cheapest price.

So make sure you charge the right price for your products and services and don’t sell yourself short.